Closing its fourth round of funding, the mobile credit card processing company just raised $200 million, making it worth a staggeringly large $3.25 billion. The company, built by Jack Dorsey of Twitter fame, allows anyone with an iPhone, iPad, or other compatible mobile device, to accept credit cards. Square is widely seen as the industry leader in the mobile payment-with-a-dongle space (I just made that term up), as evidenced by other dongles released shortly thereafter by the likes of PayPal and Intuit, among others.
In what may come as no surprise, the COO of Square, Keith Rabois, is on record at All Things D, saying that the transition from current registers and point of sale devices (like ATM card-swiping devices) to iPads or other tablets will happen within the next year and a half. Square’s partnership with Starbucks is only the first of the steps being taken actively by Square to make this a self-fulfilling prophecy.
While the iPhone 5 doesn’t include near-field communications, the highly anticipated technology that is supposed to change the way financial transactions take place, it’s only a matter of time before the swipe-through dongle route is no longer viable. While Square pioneered this approach, it makes sense for them to continue to support current and future technologies that use their own payment processing system, regardless of the physical technology that enables it. NFC or dongle, Square’s ambition is firmly in its own court.
“The era of standalone machines is over,” Rabois, a former PayPal exec, told All Things D. “Everyone will be migrating to iPads and comparable devices, which will be powered by an app — that is, hopefully, Square.”
When pushed for a timeline, he said that he thought the transition could potentially occur in the next 18 months. That may be corroborated by a survey by the National Retail Federation, completed last year. The survey found that half of the respondents planned to adopt such devices or services over the next 18 months, even though only six percent of them currently used such services of devices.
The survey, of course, was over a year ago, however, and it hardly seems as if half the retailers, at least in my neck of the woods, are using iPads to sell me things. Though, to be honest, the local farmer’s market here does, in fact, use a Square-enabled iPad to take credit cards. For cash, of course, they use a register.
Source: All Things D